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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: tekboy who wrote (30715)	8/29/2000 6:38:16 PM
From: gdichaz	Read Replies (1) \| Respond to of 54805

tekboy: "tekboy/Ares@sothere.com" Paying attention to the punch line, (and even to the gist too) agree with your insight that "value" means not basket cases and low or pitiful PE's or even worse "bottom fishing" but analysis of potential vs current buying price. Right on. Applause. (Hey, you might even be on to something here). If so, GG is value squared - even if myopic "value" investors don't understand that. What GG has at its core is that strength begets strength. And that strength has legs - much longer and stronger legs than seem apparent on the surface. Hence value. As you suggest, this is a semantic and sadly a "label" misunderstanding, not a substantive distinction. Just IMO of course. Luck to you and yours. Cha2

To: tekboy who wrote (30715)	8/29/2000 6:52:47 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

"buying something whose true future value is not accurately represented in its current price," With all due humility, I'd like to suggest that the overlap between value investing and GG is just that, an overlap, and a somewhat accidental one at that. Value investing seems to me that it has as its core principle that at any given time some percentage of stocks will be under or over valued by the market for transitory reasons. By buying those that are currently undervalued and expecting that on average the value will later come back to where it should be, one expects to make money. The Gorilla Game, however, is based on the idea that Gorillas are systematically undervalued by the market ... not because the market is paying less than normal valuation metrics would indicate is a fair price, but because normal valuation metrics underestimate the growth potential of a gorilla. Hence we see the situation commonly noted here, when normal valuation metrics indicate a stock is overpriced, but we as GG proponents know that it is not in the long term. Illustrative of this I have a friend whom I have been trying to introduce to the GG, but who is currently wrestling with the system put out by AAII. We had some exchanges in which he was running some of the stocks we talk about here through their system and, not too surprisingly, they were coming out overpriced, even the beleaguered QCOM. The reason they came out over priced, of course, is that he was using growth estimates based either on industry norms or taking the company's actual growth and then discounting it by a large fraction because it was "too high". Take the same screening and plug in actual historical growth and the same stock comes out undervalued.